Freemans acted for the Claimant building contractor in an adjudication pursuant to the Housing Grants, Construction and Regeneration Act 1996. The adjudicator found in the Claimant’s favour and we subsequently obtained a Judgment in default against the Defendant property owner to enforce payment of the sums awarded. The Defendant applied to set aside the judgment on various grounds and the matter came before Mr Adrian Williamson QC in July 2020.
1. The Defendant sought to argue that the adjudicator did not have jurisdiction to determine the dispute because the property fell under the residential occupier exception at s.106 of the Act.
The Court acknowledged there may be an argument over the scope of s.106 and the type of properties to which it was intended to apply, but it was not necessary to deal with the point because the Court found that the Defendant had, by her conduct and participation in the process, submitted to the jurisdiction of adjudicator in any event.
The Defendant would only have been able to challenge jurisdiction if she had expressly reserved her position at the outset and continued to do so throughout the process, which she did not.
2.The Defendant also sought to argue that the adjudicator had conducted the adjudication in breach of the rules of natural justice by proceeding in light of her health conditions. The Court found that the adjudicator had taken all reasonable efforts to accommodate the Defendant’s circumstances, and that he had thoroughly considered the significant volume of material she had put before him. This was acceptable and within the discretion available to the adjudicator and accordingly, there was no breach.
Given the Defendant was unsuccessful in her arguments and had not established reasonable prospects of successfully defending the underlying claim, the application was refused.
Whilst the scope and intention of the s.106 residential occupier exemption was not dealt with and remains uncertain, the decision re-enforces the need for a Defendant to clearly set out any jurisdictional objections in an adjudication from the outset and sufficiently reserve their rights throughout.
The decision also confirms the principle from Macob Civil Engineering Ltd v Morrison Construction Ltd , that although the adjudication process may have its flaws, it remains an acceptable means by which parties can resolve a dispute and it would be an exceptional case to successfully engage an argument based on the rules of natural justice.
Finally, there was also a stark reminder to all Defendants of the need to act promptly when making an application to set aside Judgment in default. Even taking into account the Defendant’s medical condition the Court decided, in the alternative, that a period of 3 months was too long and that the application would also have been refused on that basis.
The Defendant applied for permission to appeal but was comprehensively refused.